This may go some way to addressing criticism in the past that BT has directed price cuts at the more lucrative customers and services at the expense of the less well-off. BT has said that nobody's bills will go up unacceptably in the event of change.To further protect those who use the telephone least, it is expected that Oftel will propose safeguards to ensure their total bills do not go up by more than inflation.Consumer groups have warned that without some protection, freedom to increase line rentals will hurt "low users" as rental accounts for a very large portion of their bills.On competition, Oftel is expected to simplify the clauses in BT's licence to state that the company must not act in an anti-competitive way.This new and less detailed approach is expected to be more effective and harder for BT to circumvent. One rumoured possibility is a number of "free" call minutes for a pre- set quarterly charge while another is free off-peak local calls.While BT will be allowed more flexible pricing, Oftel may not allow it to use new special discount packages for larger customers to help meet the basic price cap. But now that cable television companies have become a real threat in telephony, there is a view that the company will be constrained in announcing large increases, even if the cap is gone.While the cap on line rental charges will be lifted, BT will still have to keep within an overall price limit on its basic services of inflation minus 7.5 percentage points.The company is likely to offer various options in billing customers. The argument between the regulator and the company is expected to focus on the overall result for BT, which Oftel believes will be broadly neutral.BT has lobbied for years for freedom to accelerate increases in line rentals to offset the losses in local networks. BT estimates that these losses are at least pounds 1.4bn a year and believes that it is entitled to some contribution to reflect investment of about pounds 20bn in the network over the last 10 years.Unless BT agrees the changes, the matter will be referred to the Monopolies and Mergers Commission.

The changes will allow BT much more freedom on pricing - including the abolition of the existing cap on line rental charges - but will also give Oftel stronger powers to prevent anti- competitive practices by the company.The proposals, which are the result of many months of consultation, also aim to end what are known as access deficit payments - sums paid to BT by other companies which use its local cabling systems.The payments are indended to compensate for losses in the local networks. MARY FAGAN Industrial Correspondent A radical shake-up of the telecommunications industry will be announced next week by the watchdog, Oftel. Most, however, were braced for bad news from Ladbroke concerning the lottery and the company's share price closed unchanged at 167p.To counter the financial impact from the lottery, the company is pushing the Government to make three changes to the Gaming Act.They are a reduction in betting duty from 7.75 to 5.75 per cent, a lifting of the ban on amusement-with-prize machines in betting shops, and freedom to allow customers to place bets on the lottery.Separately, Ladbroke's Hil-ton International hotel business announced a move into the Indian market which could involve an investment of $330m (pounds 206m) and create 6,000 jobs.An agreement was signed yesterday in New Delhi with India's Bharat Hotels to include taking over management of the Holiday Inn Crowne Plaza in New Delhi, management of two new hotels in Bombay and Goa and other developments.Impact of the lottery, page 20. Betting shop turnover to date is now showing a total fall of 1.5 per cent.Leisure analysts said the company would be hard-pushed to improve on the pounds 83m profit made collectively last year by Vernons and Ladbroke Racing.

The action will cost Ladbroke pounds 3m.The 14,000 employed in the 1,900 betting shops are not affected. "We can't touch the shops because our business is about providing good service," a spokesman said.Christopher Bell, managing director of Ladbroke Racing, added: "The impact of the National Lottery, particularly since the launch of Instants scratch cards in March, has created difficult trading conditions."Before the lottery's launch in November, the company's management had budgeted for a 6.5 per cent increase in betting turnover this year and had increased staff numbers at the shops by around 1,000 for extended evening openings and the introduction of Sunday racing.Turnover since March, when the Instants scratch cards became available, has fallen a further 6 per cent. JOHN SHEPHERD The pounds 100m a week being spent on the National Lottery and instant-win scratch cards was yesterday cited as the sole reason for the loss of 200 jobs at Ladbroke Racing, the UK's largest bookmaker. The redundancies come a few months after 95 out of 500 jobs were axed at Vernons, the football pools operation which is part of the Ladbroke Group.All the job losses at Ladbroke Racing are spread across 650 employees at head office and regional offices, taking in junior staff as well as senior management. There are plenty of reasons to feel relaxed even if analysts' forecasts of 15 per cent earnings growth are reined back. But the market is unlikely to provide too many pleasant suprises either. Stir in political uncertainty and forecasts of a flat market for the foreseeable future look depressingly plausible.Edited by Peter Rodgers.

Liquidity is also good, thanks to takeovers funded by overseas cash, and a seasonal influx of dividend payments. That should mean the Footsie can shrug off anything other than a catastrophic fall on Wall Street.The yield ratio in London is also much less worrying. At just over two, it suggests equities are relatively cheap both historically and compared to other markets. Compared to corporate earnings forecasts they are also not expensive by recent standards.One of the reasons London has kept its feet on the ground is that it has been largely passed over by this year's biggest investment fad: high growth technology stocks sadly account for just 3 per cent of the All Share. First, the differential between the two markets, for years a reliable 600 or so points, has widened dramatically over the past six months to about twice that much. With mutual funds historically low on cash, there was never likely to be much buying support if the market got the jitters on interest rates, which is why Alan Greenspan's comments caused such a clumsy knee-jerk response.The good news is that worries in New York need not panic London unduly.

With technology stocks representing a tenth of the market by value, any hiccup in the bull run the sector has enjoyed since the start of the year was bound to be a shock.Downgrades at Microsoft and poor figures from Intel provided the excuse, though the Dow had been living dangerously for a while. The last time the ratio between bond and equity yields reached the current 2.8, at the end of last year, the market also took a tumble. Talk that if no satisfactory deal comes off then it is back to business as usual is nonsense. The relationship with its biggest shareholder has been compromised, and Michael Marks would find it hard to keep his job Smith New Court has gone beyond the point of no return. It may not be a distress sale at the moment, but could soon become one if the uncertainty drags on. It is this realisation that will probably persuade Sir Evelyn to cash in his 26 per cent stake.